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By:

Kaustubh Kale

10 September 2024 at 6:07:15 pm

Silent Money Killer: Loss of Buying Power

In personal finance, we often worry about losing money in the stock market, dislike the volatility associated with equities or mutual funds, or feel anxious about missing out on a hot investment tip. Yet the biggest threat to our wealth is far quieter and far more dangerous: loss of buying power. It is the invisible erosion of your money caused by inflation - a force that operates every single day, without pause, without headlines, and often without being noticed until it is too late....

Silent Money Killer: Loss of Buying Power

In personal finance, we often worry about losing money in the stock market, dislike the volatility associated with equities or mutual funds, or feel anxious about missing out on a hot investment tip. Yet the biggest threat to our wealth is far quieter and far more dangerous: loss of buying power. It is the invisible erosion of your money caused by inflation - a force that operates every single day, without pause, without headlines, and often without being noticed until it is too late.
Inflation does not take away your capital visibly. It does not reduce the number in your bank account. Instead, it reduces what that number can buy. A Rs 100 note today buys far less than what it did ten years ago. This gradual and relentless decline is what truly destroys long-term financial security. The real damage happens when people invest in financial products that earn less than 10 per cent returns, especially over long periods. India’s long-term inflation averages around 6 to 7 per cent. When you add lifestyle inflation - the rising cost of healthcare, education, housing, travel, and personal aspirations - your effective inflation rate is often much higher. So, if you are earning 5 to 8 per cent on your money, you are not growing your wealth. You are moving backward. This is why low-yield products, despite feeling safe, often end up becoming wealth destroyers. Your money appears protected, but its strength - its ability to buy goods, services, experiences, and opportunities - is weakening year after year. Fixed-income products like bank fixed deposits and recurring deposits are essential, but only for short-term goals within the next three years. Beyond that period, the returns simply do not keep pace with inflation. A few products are a financial mess - they are locked in for the long term with poor liquidity and still give less than 8 per cent returns, which creates major problems in your financial goals journey. To genuinely grow wealth, your investments must consistently outperform inflation and achieve more than 10 per cent returns. For long-term financial goals - whether 5, 10, or 20 years away - only a few asset classes have historically achieved this: Direct stocks Equities represent ownership in businesses. As companies grow their revenues and profits, shareholders participate in that growth. Over long horizons, equities remain one of the most reliable inflation-beating asset classes. Equity and hybrid mutual funds These funds offer equity-debt-gold diversification, professional management, and disciplined investment structures that are essential for long-term compounding. Gold Gold has been a time-tested hedge against inflation and periods of economic uncertainty. Ultimately, financial planning is not about protecting your principal. It is about protecting and enhancing your purchasing power. That is what funds your child’s education, your child’s marriage, your retirement lifestyle, and your long-term dreams. Inflation does not announce its arrival. It works silently. The only defense is intelligent asset allocation and a long-term investment mindset. Your money is supposed to work for you. Make sure it continues to do so - not just in numbers, but in real value. (The author is a Chartered Accountant and CFA (USA). Financial Advisor.Views personal. He could be reached on 9833133605.)

‘Work place sensitisation on disability crucial’

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CBM India Trust, an Indian non-profit organisation, is dedicated to improving the lives of persons with disabilities and marginalised communities.As an empaneled access auditor under the Government of India’s ‘Accessible India Campaign’, it conducts accessibility audits of workplace facilities, evaluating physical spaces against establishedstandards and providing actionable recommendations for improvements. It is operating across 25 states and union territories to promote inclusive development in health, education, and livelihood to break the cycle of poverty and disability. Sony Thomas, Executive Director of CBM India, tells ‘The Perfect Voice’ that companies should conduct employee sensitisation sessions that promote understanding of disability inclusion. Excerpts…


How does your organisation ensure accessibility and inclusivity in education for people with disabilities?

At CBM India, we champion the right of every child to quality education and partner with governments, schools, and communities to create supportive environments where all children can learn together.Our ‘Whole School Model’ prepares mainstream schools through improved infrastructure, capacity-building sessions for educators, and adaptable curricula. This approach ensures learningenvironments accommodate all students through physical modifications, appropriate technology, and inclusive teaching methods. In addition, we’ve established Inclusive Community LearningCenters and Disability-Inclusive Resource Centers that prepare children with disabilities for mainstream schools. Through them, we provide essential support, including personalized educational interventions, therapeutic services, and training and counseling for families.


How does your NGO collaborate with businesses and organisations to create inclusive workplaces?

We partner with businesses and organisations through a comprehensive approach to workplace inclusion that addresses physical accessibility, organisational culture, and employee engagement.


As an empaneled access auditor under the Government of India’s ‘Accessible India Campaign’, weconduct accessibility audits of workplace facilities, evaluating physical spaces against establishedstandards and providing actionable recommendations for improvements.We offer employee sensitisation sessions that promote understanding of disability inclusion.


Through our volunteer engagement initiatives, corporate employees can contribute their time to support our projects, fostering deeper understanding while strengthening their companys social impact.


What challenges do you face in advocating for disability inclusivity?

Advocating for disability inclusion involves navigating complex challenges. India has established a progressive legal framework through landmark legislation such as the Right of Children to Free and Compulsory Education Act, 2009, and the Rights of Persons with Disabilities Act, 2016.


However, to fully realize the potential of these laws, we require joint initiatives across multiple stakeholders and sectors. Resource limitations affect the ability to scale successful programs to reach more communities, particularly in rural and remote areas where access to services and entitlements poses greaterchallenges. Creating a truly inclusive society requires participation from everyone. Each of us has a meaningfulrole to play in building communities where persons with disabilities are fully included and valuedfor their contributions.


What kind of support do you need from volunteers, donors, or policymakers to further your mission?

Advancing disability inclusion requires collaborative efforts from diverse stakeholders, each instrumental in creating a more inclusive society.Professionals can contribute to areas such as communications, technology, and educationthrough skill-based volunteering.


General volunteers can support our events and communityprograms. Most importantly, volunteers become powerful advocates who can raise awarenessabout disability inclusion within their networks.From donors, sustainable financial support enables us to plan effectively and expand our reach.

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